NEW YORK, February 2, 2026, 13:33 EST — Regular session
- Oracle shares climbed roughly 1.7% in early afternoon trading following its announcement of a debt-and-equity raise planned for 2026
- The software maker is presenting the plan as a way to shore up its balance sheet amid rapid cloud expansion.
- Investors juggle the trade-off between funding relief and the threat of dilution, while also grappling with doubts about AI returns
Oracle shares edged up Monday, reacting to the company’s announcement of a plan to raise up to $50 billion this year aimed at funding a costly cloud expansion. The stock gained roughly 1.7%, closing near $167.43, after fluctuating between $155.90 and $175.62 during the session.
Oracle on Sunday detailed plans for a $45 billion to $50 billion financing package aimed at calendar 2026, aiming to address concerns over funding additional data-center capacity. (Reuters)
Why it matters now: investors are quick to slam companies that hype artificial intelligence infrastructure without delivering near-term results, especially as debt levels and cash demands rise. Oracle’s recent fundraising effort also gauges how willing the market is to back AI-related credit, after the cost to insure its debt jumped sharply in recent months, according to Barron’s. (Barron’s)
Oracle plans to fund about half of its 2026 financing with equity, including an at-the-market program capped at $20 billion. The remainder will come from a single investment-grade senior unsecured bond issuance early next year. Goldman Sachs is set to lead the bond transaction, with Citigroup heading the equity and mandatory convertible preferred offerings, Oracle said. (PR Newswire)
Oracle filed a preliminary prospectus supplement on Monday for 100 million depositary shares linked to its Series D mandatory convertible preferred stock, a U.S. SEC filing reveals. Each depositary share corresponds to a 1/2,000th interest in a preferred share and carries a $50 liquidation preference, according to the document. (Securities and Exchange Commission)
Analysts see Oracle’s package as a clear signal to bond investors and rating agencies: the company plans to defend its investment-grade rating, even if that means relying more on equity. “Oracle is not only saying they’re committed to investment-grade debt, but they are sending a clear message to bond investors and the rating agencies that they are,” Guggenheim analysts noted. Barclays added that the blend of equity and mandatory convertible preferred shares could ease debt levels and bolster the balance sheet. Following the announcement, Oracle’s credit-default swaps—basically default insurance—tightened. One strategist pointed out that Oracle’s prospects appear “heavily tied to OpenAI,” keeping investor nerves on edge. (Reuters)
Oracle has lagged behind Microsoft and Amazon in the cloud space, but its drive to rent out computing power is picking up pace as clients scramble for AI resources. Now, financing details are moving markets rather than fading into the background.
But the plan carries clear risks. Issuing new shares dilutes current shareholders, and the returns on AI investments remain patchy throughout the sector. Should demand falter or pricing weaken, Oracle might find itself stuck with a costly expansion and little margin for mistakes.
Traders are eyeing pricing and demand signals on the preferred offering closely, while also looking for clues from credit markets as Oracle gears up for its one-time bond sale later this year.
Wall Street this week is zeroing in again on heavyweight earnings and crucial economic data, as investors weigh if AI-driven spending can withstand closer inspection amid tighter funding. (Reuters)
